Investors in Jiangsu Huasheng Tianlong PhotoelectricLtd (SZSE:300029) from a year ago are still down 29%, even after 22% gain this past week

While it may not be enough for some shareholders, we think it is good to see the Jiangsu Huasheng Tianlong Photoelectric Co.,Ltd. (SZSE:300029) share price up 29% in a single quarter. But that doesn't change the fact that the returns over the last year have been less than pleasing. In fact the stock is down 29% in the last year, well below the market return.

While the last year has been tough for Jiangsu Huasheng Tianlong PhotoelectricLtd shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.

View our latest analysis for Jiangsu Huasheng Tianlong PhotoelectricLtd

While Jiangsu Huasheng Tianlong PhotoelectricLtd made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

Jiangsu Huasheng Tianlong PhotoelectricLtd's revenue didn't grow at all in the last year. In fact, it fell 17%. That's not what investors generally want to see. Shareholders have seen the share price drop 29% in that time. What would you expect when revenue is falling, and it doesn't make a profit? We think most holders must believe revenue growth will improve, or else costs will decline.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

Investors in Jiangsu Huasheng Tianlong PhotoelectricLtd had a tough year, with a total loss of 29%, against a market gain of about 3.3%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 4% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand Jiangsu Huasheng Tianlong PhotoelectricLtd better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Jiangsu Huasheng Tianlong PhotoelectricLtd (including 1 which doesn't sit too well with us) .

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Chinese exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.